Bankruptcy restrictions orders have been made against the partners of Watton-based Lloyds Precision Engineering.
Mr Caine Joseph Craig Lloyd was handed a bankruptcy restriction order for 12 years and his father, Joseph Arthur Lloyd, a 10 year order - following a four day trial at the County Court at Norwich.
The Lloyds were former owners of an engineering firm in Watton which has transferred to new owners.
The firm ceased trading in November 2010 and Joseph Arthur Lloyd (67) was declared bankrupt on the petition of HM Revenue & Customs on 26 June 2012. His son, Caine Joseph Craig Lloyd (40), was declared bankrupt on the petition of HM Revenue & Customs on 30 August2012. The Official Receiver was appointed as Trustee in Bankruptcy and immediately conducted an investigation to determine the causes of the failure and insolvency of the Debtors.
Commenting on the orders, Anthony Hannon, the Official Receiver said:
Bankrupts have a duty to tell their Official Receiver what has become of their assets and why and this, the Lloyds failed to do.
As father and son have found out, such behaviour has resulted in them being investigated by the Insolvency Service and significant bankruptcy restrictions imposed on them.
The Official Receiver established that the firm had traded as engineers from the 1990s. Enquiries revealed that in November 2010 the assets of the partnership (with a value of between 131,780 and 280,130) were sold for 10 to a successor business (and the 10 was not even paid). In addition, mortgages were created over two family homes to a value of 250,000 and commercial premises for 90,000 without any money being supplied in return.
The mortgages were alleged to be a sham intended to prevent the assets being realised in the bankruptcies for the benefit of their creditors. The Official Receiver started bankruptcy restrictions proceedings on 20 June 2013 and Messrs Lloyd sought to defend the allegations.
Following a four day trial in the County Court at Norwich on 14 17 October 2014, District Judge McLoughlin made a finding of unfitness against Mr Caine Joseph Craig Lloyd and imposed a bankruptcy restrictions order for a period of 12 years and District Judge McLoughlin made a finding of unfitness against Mr Joseph Arthur Lloyd and imposed a bankruptcy restrictions order for a period of 10 years.
In his judgement District Judge McLoughlin commented that bankruptcy restriction orders were appropriate because their actions were not reasonable, prudent or honest.